Asset manager Simplify has filed a registration statement with the United States Securities and Exchange Commission to list shares of an exchange-traded fund linked to Bitcoin futures, Treasuries and options.
In a Wednesday presentation, Simplify filed with the SEC for an investment vehicle based on a Bitcoin (BTC) futures strategy, an income strategy, and an options overlay strategy. The Bitcoin Strategy Risk-Managed Income ETF, which will trade under the ticker MAXI on the Nasdaq, is a series of exchange-traded funds from the asset management company.
The fund will indirectly invest in BTC through futures contracts and, as part of its income strategy, will hold short-term US Treasury securities and ETFs that invest in Treasury securities. For its option overlay strategy, Simplify said it would buy “exchange-traded protective put options” and I would write “exchange-traded call options on Bitcoin futures and/or an ETF or Bitcoin-related ETF.”
“The main option overlay is a strategic exposure intended to partially hedge against declines in Bitcoin futures and express convictions about price increases or price movement of a specific Bitcoin-linked ETF,” the presentation said. “If the price of Bitcoin rises, the Fund’s returns may be lower than those of Bitcoin because the advisor will repurchase the written call options at a likely higher price. If the price of Bitcoin declines, the Fund’s returns may be lower than those of Bitcoin because the advisor will sell the put options at a likely higher price or exercise the put options.”
Simplify with a new filing for a “Bitcoin Strategy Risk-Managed Income ETF” with the ticker $MAXIit will hold bitcoin futures along with income generating bonds while also selling puts and purchasing calls on bitcoin ETFs. pic.twitter.com/QdVxLRyI2w
– Eric Balchunas (@EricBalchunas) April 20, 2022
Simplify has filed a new application for a “Bitcoin Strategy Risk-Managed Income ETF” with the ticker MAXI, which will hold bitcoin futures alongside income-generating bonuses, while also selling puts and buying calls on bitcoin ETFs.
The SEC has approved many ETF applications linked to BTC futures from financial firms and asset management companies in the past year after Chairman Gary Gensler hinted that he would be more open to accepting ETFs based on crypto futures rather than through from direct exposure to cryptocurrency. In January, Simplify also filed to list the shares of an investment vehicle that tracks the performance of certain Web 3.0 firms, the Simplify Volt Web3 ETF.
In October 2021, ProShares and Valkyrie became two of the first firms to launch ETFs linked to BTC futures in the United States. Nevertheless, the SEC has rejected all Bitcoin Spot ETF applications as of press time. Grayscale is currently awaiting a decision from the regulator on whether an application to convert its Bitcoin Trust into a spot BTC ETF for public listing will be accepted.
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